Bill for US telcos to bin Chinese kit blows out by $3 billion
- Reference: 1658120347
- News link: https://www.theregister.co.uk/2022/07/18/scrp_shortfall/
- Source link:
FCC chair Jessica Rosenworcel [1]wrote to explain the situation, which arose from the USA's desire to remove Chinese comms kit at local carriers in the name of national security. Carriers were offered cash to replace Chinese kit with American products.
The scheme first allocates funding to remove the kit for applicants with under two million customers. Then, if any money is left, it goes to public or private non-commercial education institutions, healthcare providers and libraries. All other applicants get whatever pennies are left.
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In the letter, the FCC estimated that the cost of the Reimbursement Program amounts to $4.98 billion – of which Congress has appropriated $1.9 billion.
[3]
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But as it turns out, after the first tranche of payments there is no money left. In fact, the current funding of $1.9 billion only covers 39.5 percent of the first tranche's $4.7 billion dollar cost. If left unfunded, no entity will be fully reimbursed for ripping out Chinese kit.
"Because demand within the first prioritization group exceeds available funds for the Reimbursement Program, the Commission will prorate reimbursement funds equally to each eligible applicant in the first prioritization group," explained Rosenworcel.
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Zero applicants fell into the second category – education institutions, health care providers and libraries. The remaining $280 million reflects the third category of "all other applicants."
[6]FCC: Applications for funds to replace Chinese comms kit lack evidence
[7]US carriers want to junk three times more Chinese comms kit than planned
[8]Will Chinese giants defy US sanctions on Russia? We asked a ZTE whistleblower
[9]Remember when Huawei's CFO was detained in Canada? She's been promoted to chair the board
The [10]decision to help small to medium US carriers comply with the Secure and Trusted Communications Networks Act – which requires removing and replacing Huawei and ZTE network equipment from US systems – was made in July 2021.
The FCC disclosed last month it received 181 applications for access to the funds, [11]totaling $5.6 billion – of which 122 applications showed [12]deficiencies like insufficient cost estimates or support materials to justify cost claims. ®
Get our [13]Tech Resources
[1] https://www.fcc.gov/chairwoman-rosenworcels-letters-congress
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YtUvQy6OsrfwNaYARv3jOAAAAEM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YtUvQy6OsrfwNaYARv3jOAAAAEM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YtUvQy6OsrfwNaYARv3jOAAAAEM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YtUvQy6OsrfwNaYARv3jOAAAAEM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/06/16/fcc_says_applications_for_cash/
[7] https://www.theregister.com/2022/02/07/secure_and_trusted_communications_reimbursement_program_overrun/
[8] https://www.theregister.com/2022/03/28/ashley_yablon_zte_whistleblower_interview/
[9] https://www.theregister.com/2022/04/04/meng_wanzhou_huawei_rotating_chair/
[10] https://www.theregister.com/2021/07/14/fcc_huawei_zte_replacement/
[11] https://www.theregister.com/2022/02/07/secure_and_trusted_communications_reimbursement_program_overrun/
[12] https://www.theregister.com/2022/06/16/fcc_says_applications_for_cash/
[13] https://whitepapers.theregister.com/
Curious factoid.
I was slightly suprised by this-
Zero applicants fell into the second category – education institutions, health care providers and libraries.
Ok, so Huawei kit may not have the brand recognition of a Cisco, but came with a considerable capex & opex saving. So whether that indicated those sectors overpay for their networks, or maybe using some other tin. Which is probably made in China anyway. Lack of ZTE is less suprising as their kit's generally aimed at telco trade customers, although can benefit retail users.
Also slightly curious about Cisco in health care. Not a sector I've done a lot of work in, but Cisco kit has typically been designed for use in office environments and less useful in 'industrial' environments where factors like noise can be an issue. I think it may have been ZTE who arranged an Ethernet switch demo in an electricity substation. CIsco and ZTE box on a table, staff flipped a breaker, Cisco stopped working. One of those fun design lessons where I learned that if their kit is around electrical impulses, traction currents etc, it paid to stick'em in a decent EM-resistant enclosure with a decent clean power feed.
Re: Curious factoid.
-> Ok, so Huawei kit may not have the brand recognition of a Cisco,
Living in a bubble? Cisco has some brand recognition - for having seemingly endless backdoors.
Avoidance
Big corporations want to avoid employment laws, taxes and other regulations they lobby for, so that the competition is kept at bay and they outsource everything to Asia so they don't have to worry about it.
Just ban using any foreign kit and watch big corporations having a meltdown having to taste their own medicine.
As all things politics - the true cost is never initially disclosed.